May 24, 2004—RFID tags are very much on their way to becoming cheap enough to be used extensively. Many RFID pilots are being conducted to prove the business case. As you read this, some companies are getting ready to transform small pilots into full-grown implementations. But the technology is still very immature, and that creates problems for end users.

Recently, I was speaking to the CIO of a major food-processing company. He said that he was being offered RFID solutions that he thought were either very expensive or ineffective in the long run. He wanted to know how he could protect his investment in a technology that is still maturing. How could he leverage his existing IT infrastructure? What will his throw-aways be when RFID components are introduced? How can he define a piecemeal approach and build a middle-of-the-road strategy that will deliver a return on investment?

These are just some of the questions that companies looking to deploy RFID are asking. The problem is, there are no easy answers. The technology is immature, which makes it hard for companies to ensure that their investment in an RFID system will pay off by providing them with real-time data they can use to boost efficiencies within their organization. The biggest problem is how to integrate RFID data effectively with your backend systems.

Today, there are two common types of systems integration options available in the market. Some RFID system integrators and RFID hardware vendors are offering homegrown solutions to integrate already existing business applications with RFID as an extension to the services they offer as executors of the technology. Others are offering middleware solutions to integrate RFID with the existing IT infrastructure. Neither of these solutions today is likely to deliver the value customers need.

Though homegrown solutions can incorporate RFID into the infrastructure, they leave little or no room for future upgrades, such as introducing a new enterprise application, without additional capital investment. And RFID middleware products can be pricy and the cost of product support can be significant.

What then will satisfy the end user's need for an end-to-end solution that automates and enhances business processes with real-time RFID information? The best solution is not to depend upon RFID enablers for enterprise integration and instead have enterprise application vendors provide extensions to RFID as one of the data sources. Enterprises are increasingly becoming conscious of such an approach since it has a twofold advantage: It prevents a third party from altering a perfectly running backend, and it also reduces the primary and recurring costs.

End users need software vendors to upgrade their applications to support RFID related data. The vendors, on the other hand, not only need to support interoperability, reliability and efficiency of RFID hardware, but they also need to extend their existing architecture to deal with the enormous amounts of data, aggregate it and analyze it within their applications.

Enterprise application vendors, such as SAP and Oracle, have started to offer an RFID-enabled backend that takes in data directly from readers by providing adapters to various RFID hardware. These new apps or adapters are designed to help companies manage and share RFID data within their business processes and to integrate RFID data into their existing IT systems. This is a start. But for RFID adoption to continue its current momentum, end users need to encourage their software providers to step up and provide the applications and integration tools needed to take advantage of the technology without adding a new layer of complexity and cost to their IT infrastructure. Otherwise, companies will have to keep investing in their RFID systems without achieving a significant return on their investment.

Saket Batra is a research analyst at KeyTone Technologies, a Santa Clara, Calif.-based provider of enterprise solutions. To comment on this article, click on the link below.

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